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Increased Healthcare Enrollments Costing Insurance Companies

Insurance companies are facing higher costs after increased enrollments have led to more hospital visits for treatment.

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Photo: marsmett tallahassee (Flickr)

More than 8 million people have signed up for insurance through state and federal healthcare exchanges in the last year.

While hospitals are making more money from people who recently signed up for health insurance under Obamacare, insurance companies might be losing money, according to one analyst.

An analysis from the Wall Street Journal shows that many hospitals are seeing more patients now than this time a year ago, after more than 8 million Americans signed up for insurance through a health exchange and millions more enrolled in Medicaid programs.

Kosali Simon, health policy analyst and professor at IU’s School of Public and Environmental Affairs, says that cost is shifting to insurers, likely because many of the newly insured have needed care for some time.

“A lot of people started with new coverage in January that already are using services for which you thought the high deductible would have held them off a little longer,” Simon says. “But evidently, these are people who knew they needed health care and may have delayed it until they received insurance.”

The Wall Street Journal’s report also says insurance companies are seeing unexpected expenses from these patients, mostly because they are going to hospitals for services rather than clinics or doctor’s offices.

Though the increased hospital visits could cause insurance companies to raise their rates, Simon says that won’t happen immediately.

“We don’t think it will all play out by the next open enrollment in the fall, because those prices have to be submitted before the claims information from the first year are known.”

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  • S. Clemens

    People new to the system are going to the hospital for treatment just like they always have done. As they get family physicians that should taper off. Then the cost of medical care at hospitals should see a corresponding reduction. The result? Long-term, the insurance companies will save money. Short-term, they will use this as an excuse to raise rates. I’m wondering if the only real way to drive down costs is Medicare for everyone. Medicare seems to work pretty well, and it would be nice not to have insurance companies dictating treatment to doctors and patients. Profits should not be part of the cost of health care for citizens of a first-world country.

  • Bob Eckert

    The message between the lines of this piece of insurance company propaganda is that they will be raising premiums this fall at enrollment time just as they did before the Affordable Care Act, except that now both the federal government who is providing subsidies — and — the person paying the remainder of the premium will not be able to afford the cost and the person with the policy will have to cancel and pay the IRS penalty every year instead, a cost to him/her with NO benefit at all.

  • http://www.johnathangrant.com/ Johnathan Grant

    Is this an increase in hospital outpatient services? Most Indiana hospitals are reporting declining inpatient volumes, allegedly due to patients choosing non-hospital settings of care such as urgent care clinics, doctor’s offices, independent labs, imaging centers, etc.

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